Grow Africa’s role is to accelerate responsible investment in African agriculture – i.e investment which, in the context of Environmental, Social and Governance (ESG) concerns, promotes positive impacts and avoids negative ones. Implementing responsible agricultural investments in Africa can be challenging.  African agri-businesses often operate in a challenging and weakly regulated business environment, in which operationalizing principles of responsible investment can add costs that compromise their short-term commercial viability, especially if faced with less diligent competition.

Grow Africa is a partnership platform, not a regulator, so whilst it does not have the scope nor mandate to enforce responsible practice, it plays a key role in promoting responsible investments. It does so by fostering an environment in which companies can achieve competitive advantage from delivering positive impacts, and from mitigating negative ones. Grow Africa achieves this through:

Support: strengthening the enabling environment so that agri-businesses can thrive responsibly.

Learning: helping partners innovate and scale commercially competitive solutions to key aspects of responsibility.

Accountability: elevating the incentives to operate responsibly.

SUPPORT: STRENGTHENING THE ENABLING ENVIRONMENT

Grow Africa’s core work is to convene public and private sector partners around the collective goal of addressing weaknesses in value chains and market systems, thereby reducing the risks and costs of investing in African agriculture. This work helps companies take a longer-term view on their investments, and embrace commercial strategies that build shared value with the communities and stakeholders around them, including through job creation, increased incomes, and better access to affordable and nutritious food.

For example, for 2015, companies reported that their investment commitments resulted in over 10.4 million smallholders being reached through sourcing, services or training. Additionally these investments created over 30,000 jobs in 2015.

LEARNING: INNOVATING COMMERCIAL SOLUTIONS

Knowledge and innovation are needed close the gap between aspiration and reality with regard to responsible investment. Grow Africa is convening partners to share and innovate commercially viable solutions, and to disseminate information on best practice:

The Smallholder Working Group, established by Grow Africa and IDH, helps develop innovative smallholder business solutions with farmers, companies, governments, and expert organizations to transition smallholders from subsistence to commercially sustainable production. The main purpose of the SWG is to share knowledge in order to learn from failures and successes, focus on a number of key questions, develop solutions, and implement changes.

With Grow Africa’s support, the New Alliance Women’s Economic Empowerment Working Group, brings together representatives from companies, regional bodies and development partners to identify and communicate the business case for agri-business to unlock the developmental and commercial potential of women farmers, agri-entrepreneurs and employees.

Grow Africa is actively promoting due diligence tools and approaches to the companies in its network. Specifically, the New Alliance developed an “Analytical Framework for Investors: Due-Diligence and Risk Management for Land-based Investments in Agriculture.” This practical tool helps companies to assess and address ESG risks related to land-based investments, and helps assure compliance with the AU Principles and VGGT. During 2015/16, Grow Africa is helping New Alliance partners to facilitate a pilot year for this new tool.

Lastly, Grow Africa is designed upon assumed causal relationships between cross-sector collaboration, investment, job creation and smallholder incomes, and reduced poverty and hunger. There is a growing evidence base for this Theory of Change, but it is contested and requires further critical research and refinement. Grow Africa is working with partners to initiate a body of independent research that will help further understand under what conditions agricultural investment does deliver inclusive and responsible outcomes. Grow Africa has commissioned some targeted impact assessments of specific investments, and these are available on its web site.

 ACCOUNTABILITY: ELEVATING THE INCENTIVES TO OPERATE RESPONSIBLY

Grow Africa has established new levels of transparency for agricultural investments in Africa, and elevates the accountability of companies and governments to help ensure investments are made responsibly and deliver shared value:

Grow Africa facilitates investment commitments that are made from the company to the government in the form of Letters of Intent (LoIs). These include descriptions of the expected development outcomes, how the investment is aligned to national sectoral priorities, and a statement that commits the company to operating responsibly. Grow Africa provides summaries of these LoIs in each Annual Report, and they will also be available on its website.

Annual Reporting on LoIs by companies increases accountability for impact, and offers a neutral means for identifying successes and challenges. Grow Africa analyses these responses and reports them in the context of the New Alliance, so they are subject to stakeholder review in country. Grow Africa’s neutral role enables companies to highlight issues such as corruption, land tenure or smuggling, that undermine their capacity to invest responsibly but require better management by government and would otherwise remain hidden.

Grow Africa provides a channel for communicating expectations on responsible investment, and to highlight the long-term strategic importance for companies. Grow Africa reviews LoIs for investments that have higher ESG risks and targets them with relevant resources.

Agricultural investments are controversial and challenging, and some of the 200 investments are likely to result in grievances being aired. The companies have the primary responsibility to manage grievances well and in accordance with international practice and national legislation. Governments may also have a role, where they are implicated. If requested, Grow Africa aims to play a supporting role in providing guidance on how to undertake a grievance procedure and where to access expert or impartial facilitation. During 2015/16, Grow Africa is looking for a strategic partner who can develop such guidance, and provide expert advice to parties involved in any grievance. Beyond any legal consequences, if a grievance procedure concludes that a company has operated unethically then that company should subsequently be excluded from all further involvement with Grow Africa and the New Alliance for Agriculture and Food Security.

Read the full Grow Africa positioning statement on responsible investments here.

Resources

Grow Africa reported almost $500 million in new investment commitments in 1Q 2016, an indication of sustained private-sector confidence...

Private sector agribusinesses that are part of the Grow Africa partnership report $500 million in new investment in 2015, bringing to $2...